India Eyes SEZ Reforms to Boost Domestic Production and Import Substitution

Union Minister Piyush Goyal announced the government's plans to enhance production in Special Economic Zones (SEZs) by exploring relief measures. This effort aims to promote domestic market use, serve as import substitution, and level benefits between SEZ supplies and foreign imports. Legislations and proposals are under consideration.

Union Commerce and Industry Minister Piyush Goyal revealed on Saturday that the Indian government is actively investigating potential relief measures designed to stimulate production within Special Economic Zones (SEZs). During his visit to Brandix textile units situated in the Andhra Pradesh SEZ, Goyal emphasized the ministry's efforts to encourage the utilization of excess capacities in these zones for the domestic market.

The minister highlighted that such measures would also act as import substitution, reducing the advantage that foreign goods currently enjoy over SEZ supplies in domestic tariff areas. 'We are striving to address this disparity and foresee a substantial increase in output from all SEZs,' Goyal remarked. He also mentioned that SEZ Commissioners nationwide have been directed to convene a meeting in the coming week.

The minister, attending the CII Partnership Summit 2025 in Anakapalli, noted that efforts include exploring exemplary infrastructure standards at Brandix Park and Andhra Pradesh MedTech Zone to elevate SEZ facilities to global standards. When questioned about potential new legislation for SEZ relief, Goyal assured that all avenues, including possible legislative amendments, are being considered.

On the topic of allowing SEZs to market products in the domestic tariff area without duties, Goyal confirmed ongoing evaluation of all proposals. 'Our aim is to decide what best serves both SEZ and DTA units, following inter-ministerial discussions,' he affirmed.

The announcement aligns with increasing demands from industry players to sell SEZ-made products domestically, as current rules oblige them to pay duties on finished goods. As areas treated as overseas for trade, SEZs face restrictions on duty-free domestic sales.

Although SEZ companies benefit from duty-free importation of raw materials, they must either export the final goods or sell within the domestic market, incurring applicable duties. (ANI)

(With inputs from agencies.)